Can someone explain what a balloon payment is for dummies?

>>363838
It's the remainder, what you will owe at the end of the loan. It needs to be paid as a lump sum, or refinanced.

>>363849
exactly what I was about to say

>>363850
Great minds and fools

OP, whatever you're buying (a car) costs more than my home.

>>363849
So after paying for 60 months I go up to the store and drop a big fat cash of 50k?

>>363854
I live in kangaroo land so eveything is more expensive, I live in a duplex worth 1 Million 200k

>>363858
Or you don't and they take the car back.

>>363862
Ohh so theres that as well

>>363858
I'm in Brisvegas mate.

>>363862
Yeah, that's the other option. If you do that, though, beware that they'll try to sell (((it))) and if they get less for it than what you owe (the balloon), they'll charge you for the difference.

>>363878
Read your contract. Sometimes it's optional (in which case you either pay it and get the car or you don't pay it and walk away), and sometimes it isn't (in which case if you don't pay it you've defaulted and the car gets repossessed).

Again, read your contract.

Read your contract.

>>363888
>sometimes it isn't (in which case if you don't pay it you've defaulted and the car gets repossessed).
My point is that in this scenario, the lender/bank/___ can invoice you for the difference between the balloon and what they actually sell it for; keeping in mind they don't try very hard to get a good price, since they can invoice you for the difference anyway.

I've had this type of contract in Aus before, which is where OP is, so I suggest it's very possible that his contract could be similarly worded. We can't just default and walk away from cars/houses/etc like it's apparently easier to do in the US.

>>363896
Sure, but in a balloon-optional finance agreement you aren't defaulting, you just give the car back.

Do you think a delivery company wants to be stuck owning a hundred clapped-out white vans? Of course they don't. So they lease them then give them back and lease new ones. There's no hard feelings because it's an option in the contract they agreed upon.

This is why you read your contract and don't just assume.

In this case OP is buying a Tesla, so if 5.19% quoted is an APR and the buyback guarantee is as described in https://www.tesla.com/en_AU/support/tesla-financing-faq , then he's up for $3500, $4500, or $8000 hand-back payment if he gives it back after five years and keeps it under 15000, 20000, or 25000 km.